It seems that the bears took advantage of the weak volume and hammered the price 5%. Hopefully the damage will be repaired and 60K will be soon broken. By broken, I mean staying above 70K
Anyway, I've been thinking recently for a tool to measure the profit/losses of the daily traders who follow the trend. It is well known that those kind of traders are 99.9% losers. I mean, for each pump, no matter how big, they make on average 1%-2% profit. While on the dumps they can't afford a 1-2% stop loss and so make on average (x/2+1)% loss, if the dump was x%. (I'll try to explain my logic below.) Thus, they theoretically are always losing in the longterm. I guess thay have the same level of math and science as proudhon and can't understand this.
If we count the last month(s) losses, we can give an estimate when they remain with 1%-10% of their initial portfolio. And that is the point when they have no power to resist the pump (like a coiled spring) and the price shoots up 20%-100%. So, whether several bigger dumps like 10%-20%-ish or multiple smaller 5%-10%-ish will lead to the same result. Since we've had several bigger dumps already, I believe that the battle for 60K will be much shorter that for 10K last year. My rough estimates show that in the next week we should reach that hot spot and break the resistance. The algo should be something like this (very rough, of course):
1. A trader buys with N amount of cash bitcoins.
2. If the prices falls x%, he cuts his stop loss on average at (x/2+1)%. The reason for this logic is that at least half of the daily trend traders bought at the top and resisted the urge to sell, when they finally capitulate at x%. And practically nobody puts a stop loss at -1% unlike the profit taking. The number of traders putting stop losses -1%-3% is also relatively small, judging by the volume of sells which increases exponentially starting -4%.
3. If the price raises x%, he sells with a 1.5% profit on average. We see clearly that in a trading without real investors, each 1-2% increase is being erased in a matter of seconds, because of this behaviour. In that case, the trader enters again later that day, or the next, believing he timed the uptrend (which in most cases occurs higher than his selling point, on average in a bull market, say +2%). And then he repeats steps 1-3.
This is an easy programming problem and the parameters can be adjusted with the help of some examples for longer battles at some resistance points. Of course, this behaviour will at some point inevitably incur the trader a loss, which will increase with time to the point of losing almost his entire initial investment. Then he either choses to enter with a new sum (believing that this time will be different and forgetting the famous saying - you can't expect a different result doing the same things over and over again), or quits trading. The only "successful" traders are those who manage to reach 2-3 successful 1-2% trades and quit. They argued and mocked the hodlers boasting with 5-10% profits around 6K-7K last year. And of course they've missed the 15x increase for the year. But the vast majority of traders are greedy, so 99.99% of them do not quit after that but continue until they lose (almost) everything.
